Bankruptcy laws may be tighteningCredit card issuers want U.S. to put limits on use for unsecured loans!
U.S. banks have been charging off more consumer loans in recent years after consumers stopped repaying or had their debts discharged through bankruptcy proceedings, and that will likely increase as interest rates rise, said John McCune, a banking industry analyst with SNL Financial in Charlottesville, Va.
- The 25 largest U.S. banks charged off $19.3 billion in loans in 2000; that grew to $27.5 billion in 2003, SNL data show.
- In 2003, Citigroup led the pack with $7.5 billion in charged-off consumer loans, followed by Bank of America Corp., based in Charlotte, N.C., with $2.3 billion, according to SNL data. JPMorgan was next, with $1.6 billion.
- The biggest boom to creditors from the proposed legislation is that many consumers will be discouraged from filing under Chapter 7, said Edward Janger, a professor at Brooklyn Law School.
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The bill allows creditors to demand a hearing before a judge to determine whether a person filing for bankruptcy would fail the means test and should instead file under Chapter 13. The cost of hiring an attorney to prepare for and attend the hearing would deter many applicants, he said.
http://www.jsonline.com/bym/news/jan05/288766.asp
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